For every £1 spent on an employee assistance programme (EAP), UK employers see an average return on investment of £7.27
A common challenge for employee benefits consultants and group risk advisers is quantifying - and therefore communicating - the tangible return of investment (ROI) for employee assistance programmes (EAPs) to UK employers.
A new study from the Employee Assistance Professionals Association (EAPA) has set out to calculate the financial value of EAPs in relation to the impact of employee absence, presenteeism and productivity on businesses.
The analysis, which uses the biggest data set on EAP usage yet, takes in 2,000 calculations made via the EAPA's UK ROI calculator since the beginning of 2019, representing anonymised information for four million employees.
The figures, presented as part of a report titled Financial Return on EAPs 2020: How Does Your Organisation Compare?, shows that for every £1 spent on an EAP, UK employers see an average ROI of £7.27, whatever the size, company, sector, geographical location or service used. This compares with the ROI of £5 for every £1 spent on tactics for supporting employee mental health in general proposed by the Deloitte report, Mental health and employers: the case for refreshing investment, earlier this year.
According to the new findings, EAP usage is also consistent - around 10.4% of a workforce - and sectors with the highest ROI are transport and utilities (£8.61); manufacturing (£7.68); and finance (£7.64). The lowest are: agriculture (£4.12) and charities (£7.11).
National employers, located at premises across the UK, have lower ROI (£6.61), compared with the highest in Northern Ireland (£8.60), the North East (£7.96) and South West (£7.92).
'Where usage is higher, ROI is greater'
"The new data is valuable evidence of the scale and consistency of ROI from EAPs," said Paul Roberts, project lead and EAPA executive. "Wellbeing resilience, more than ever, is a pillar of organisational performance, and HR need proof of how their approaches are working."
"The variations that do exist in ROI between employers are an important lesson. The calculator data essentially shows that where employers are most engaged with their EAP, where usage is higher, the ROI is also greater. The agriculture sector is an example of the impact of a dispersed workforce, where staff are less likely to be based centrally in office environment and without same level of access to HR, employer communications and manager presence. Similarly, staff at national operations appear to be less engaged with EAP services, where the presence of HR and internal communications may be less overt.
"With more home working and flexible arrangements HR need to ensure there are constant communications around EAPs and ensure the role and range of EAP services is flagged at every key point in an employee's career: when they move between roles, from full-time to part-time, or change to flexible working."
The ROI calculator, launched in September 2018, was developed for EAPA by the Institute for Employment Studies (IES) and it is free to use. It provides ROI insight into EAP or, with more detailed information on absence and productivity, can be used for regular management reports, as well as for benchmarking against competitors in the sector, regionally and employers of the same size.
"The tool can also be used to look at the potential impact of trying different models of services, changing the level of investment or pushing promotional activity to up the levels of usage, as the basis for HR conversations with Directors of Finance," said Roberts.
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